Tax compliance has evolved at a rapid pace in recent years. As governments go digital, loopholes are closing and reporting timelines are shrinking from weeks to milliseconds.
The old way of doing things isn’t enough for the new world of rapid-response compliance. But these new challenges can also foster new opportunities.
Businesses are taking a new approach to compliance, and so are tax professionals. What was once a burden is now a strategic priority, and adaptable tax professionals who can master compliance are becoming heroes.
There’s a new job description in indirect tax — and it’s increasingly strategic, data-driven and global.
Then and Now: Keeping up with Changing Rules
New business models from ecommerce to global supply chain management are forcing governments to re-address their tax requirements and regulations. Rules are constantly changing, making it increasingly hard for businesses to keep up.
- Old role: Tax managers were responsible for managing tax-related regulatory updates that nobody could see coming and ensuring systems across the organization were in compliance. Significant tax rate and rule updates often resulted in reactive “fire drills,” which disrupted internal workflows. On the other hand, non-compliance with these updates raised the risk of disruptive, expensive audits.
- New role: Now in the driver’s seat, tax managers are armed with all the real-time data they need to comply with complex tax laws across the globe. Tax managers proactively and confidently manage their teams with more time to support business growth by using knowledge-based solutions.
Then and Now: Managing Complex VAT Requirements
Sales tax and value-added tax (VAT) requirements are becoming more complex as governments work to determine proper collections and pilot technology-driven processes to mitigate fraud.
- Old role: Tax managers were forced to monitor and sift through complicated legal jargon to stay updated and knowledgeable. As the compliance regulator, tax managers often had to disrupt workflows and hassle their tax and IT teams to implement new requirements, with little insight as to what was coming next.
- New role: With access to real-time regulatory analysis updates, tax managers are fully prepared to proactively lead new implementations and processes. Tax managers now confidently look ahead and provide valuable regulatory insights to support their companies’ growth strategies.
Learn how leaders are now able to take a proactive approach to regulatory compliance despite the rapid changes in global tax compliance and business-to-government reporting. Read The State of Regulatory Compliance.
Then and Now: Providing Required Tax Information in a Crunch
Tax authorities are requiring transaction-level details more frequently. Governments want more information, and they want it fast — sometimes even before transactions occur.
- Old role: Tax managers required to fulfill requests often had to jump through hoops to uncover data that was on paper or living in dispersed spreadsheets, in data silos or hidden outside of legacy systems, or lost completely. With the majority of their time dedicated to gathering the most updated and accurate information for filing, tax managers had little opportunity to innovate or positively impact the bottom line.
- New role: Standardized, data-driven tax compliance now has tax managers at the center of strategic business initiatives. As electronic compliance processes become standardized, tax managers now leverage technology-driven requirements to their company’s advantage. By automating internal processes, for example, manufacturing employees preserved 53% of time spent on technology maintenance and updates according to a recent Aberdeen report. These kinds of efficiencies and cost-savings can be shared across the organization.
Then and Now: Maintaining Global Regulatory Expertise
Business models and tax mandates are spanning borders. In each jurisdiction, the compliance rules, requirements and deadlines vary.
- Old role: Tax managers had to maintain accurate knowledge about VAT and use tax laws around the world, understand taxation requirements for products sold and manage necessary changes across the organization and within technology systems. This process required a lot of time, increased risk and often included unplanned IT maintenance costs.
- New role: Tax managers with direct access to a global regulatory database are always knowledgeable about the latest requirements impacting their company. With centralized data, tax managers have information readily available to defend their companies when facing audits — thereby avoiding penalties.
Indirect tax professionals transferring their compliance burdens to tech-driven processes will also take on a variety of new roles that drive business growth.
New “Hats” for Tax Managers to Wear:
The Expert: A source on indirect tax risks, both domestically and internationally, with the ability to keep the business ahead of risk, prepared for potential audits and avert additional costs.
Operational Hero: A process expert who makes complex processes simple with the help of automation, electronic processes and centralized data.
The Software Champion: A technology leader who is responsible for ensuring indirect tax compliance software solutions are built not just for today but for the next decade of change.
Audit Defender: A risk-aversion professional armed with a single line of sight into the data required to quickly and accurately respond to audits. The defender stays several steps ahead of regulators.
Growth Innovator: An opportunist who removes growth barriers, translates regulatory trends and transforms compliance challenges into business advantages. The innovator strategically supports new market and product opportunities.
The regulatory environment is more complex than ever. Staying on top of evolving taxation rules and compliance requirements is nearly impossible without technology intervention. Companies now have the opportunity to elevate the tax manager role to support growth initiatives — and transfer burdens to the Intelligent Compliance Cloud.
Download our State of Regulatory Compliance eBook to learn how to reduce risk and avoid internal inefficiencies and contact us to get started on your company’s internal transformation.
The post The New Strategic Role of Indirect Tax Professionals to Master Compliance appeared first on Sovos.
About the AuthorMore Content by Matt Walsh